New York opted to tender contracts to outfielder Melky Cabrera and pitchers Chad Gaudin and Sergio Mitre, while cutting ties with Wang, a sinkerballing right-hander who was considered the Yankees' staff ace for a time before injuries jarred his promising career.
"There's no doubt that we had to make a tough decision," said Yankees general manager Brian Cashman. "We are still hopeful that our relationship can continue, but those decisions are yet to be made."
Had the Yankees tendered Wang a contract, the maximum pay reduction he could have been given in arbitration would have been $4 million, or 20 percent of the $5 million he earned this season.
The Yankees could re-sign Wang to a lesser, incentive-based deal, as many have speculated they will attempt to do. But Wang's agent, Alan Nero, said the hurler will now engage all 30 clubs as a free agent and take all other options into consideration.
"I think it's difficult to rationalize a non-tender as further building a bridge with a team, but we'll see," Nero said.
The Yankees' other three decisions fell into line with much of what Cashman spoke about at the Winter Meetings in Indianapolis. Cabrera is currently the starting left fielder, and Gaudin and Mitre will be candidates for the back end of the rotation.
Making Wang a free agent could produce a relatively inexpensive and low-risk addition for another club. It is thought that the Dodgers -- managed by former Yankees skipper Joe Torre, a consistent supporter of the pitcher -- would have some interest.
Nero said on Friday that his expectation is that Wang will be ready to pitch in Major League games by May 1.
"He is way ahead of schedule," Nero said. "He started his throwing program on Dec. 1 and is under the supervision of Dr. James Andrews with his physical therapy. I'm very optimistic that he will be in the best shape of his life."
Wang, who will be 30 by Opening Day, was considered by many to be the ace of the Yankees' staff as recently as 2008. But he has never recovered from a June 2008 right foot injury, suffered while running the bases in an Interleague game at Houston.
After returning from that Lisfranc tear, Wang struggled mightily, and some speculated the foot injury had altered his motion. Wang was eventually sent to Tampa, Fla., to work on his mechanics, but he was sidelined for good after a July 4 start against the Blue Jays, having Andrews perform season-ending right shoulder surgery.
Wang finished the 2009 season 1-6 with a 9.64 ERA in 12 games (nine starts), and Cashman said that the Yankees believed he would be Major League-ready at some point between April and June 2010.
Wang remained with the Yankees through this past postseason, using Yankee Stadium's facilities to further his rehab process. While Wang said in October that "hopefully I will be here next year," he was very much aware that the situation may be out of his control.
"I don't know what will happen in the future -- I'm just waiting to see," Wang said during the postseason, when he watched from the bench as the Yankees went on to win the World Series. "I can't worry about it. Right now, I'm just focusing on rehab and getting healthy."
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.